[Congressional Record Volume 153, Number 145 (Thursday, September 27, 2007)]
[House]
[Pages H11014-H11018]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IS AMERICA READY FOR AN EXPENSIVE HEATING SEASON?
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 18, 2007, the gentleman from Pennsylvania (Mr. Peterson) is
recognized for 60 minutes as the designee of the minority leader.
Mr. PETERSON of Pennsylvania. Mr. Speaker, it is September 27. We are
just finishing the first week of fall. It doesn't seem possible, Mr.
Speaker, that summer has slipped by. We are now entering the fall
season. That means the cool nights and chilly days will soon be coming.
The northern part of the country has already had a couple of movements
of Canadian air down where we have chilly nights. That will soon cover
most of the country. That means the heating season will begin.
The question I ask is this: Is America ready for the most expensive
heating season that we may have ever faced? Yes, all of the last week,
the first week of fall, we have had $82 oil. In fact, at the close
today it was just 12 cents, it would have been $83 oil. I remember when
$50 oil caused a panic, and $60 oil was going to be the end of all, and
then $70 oil, and this week we have had $82 oil all week. I haven't
heard many people talk about it because that price hasn't hit us yet.
It hasn't hit the pump yet. It hasn't hit home heating costs yet.
[[Page H11015]]
But $82 oil will give us the highest home heating oil prices we have
ever had. It will also give us very high propane costs to heat our
homes. Now, 60-some percent of our homes are heated with natural gas.
The current price of natural gas, which is at the low ebb because of
the summer low usage, is at $7 today. That will soon be rising as we
get into the fall season and gas consumption increases. This year, all
of the gas distribution companies are warning their customers that they
will pay from 9 to 15 to 20 percent more this year than last. That is
only on a prediction, because that depends if we have no storms in the
gulf or no major supplier of gas that goes offline. A storm in the
gulf, and we have not had one that really damaged the gulf now all of
last year and all of this year, would give us $90 to $95 oil quickly,
could give us $12 to $15 gas quickly. Then we would have real pain in
America, not only for those that are heating their homes, but the ones
that buy this energy every day of the week, every week of the year, the
manufacturers and the processors in America that run our plants: the
steel mills, the aluminum mills, the chemical plants, the fertilizer
plants, those who process our goods, those who bake our bread, those
who cook our foods. I was talking to Hershey Foods today about the
energy they use to roast the peanuts and melt the chocolate and make
the candy. Energy is consumed in every process of life.
What has this Congress, in the few months we have been here, what
have we accomplished to stabilize energy prices? I am just going to
turn this chart over because that simplifies what we have not
accomplished, because we haven't accomplished anything. There has not
been one bill passed. There has been nothing changed. But we have been
stirring around doing things.
I want to ask you tonight, Mr. Speaker, are the things we have been
doing productive and helpful? Will they help Americans heat their homes
and drive their cars with affordable energy? Well, the legislation that
has been approved by this body, and I believe the Senate, removes 9
trillion cubic feet of gas in the Roan Plateau that was permitted. All
the NEPA studies were done. All the environmental assessments were
done. It was ready to be drilled. This legislation takes 9 trillion
cubic feet of natural gas off the market.
This legislation also locks up the oil shale reserves in the West.
What are the oil shale reserves? Well, some think it is the largest
reserve of oil in the world. We still haven't figured out how to unlock
it from the shale rock. But to the north of us, we have the tar sands
that are very similar. It is going to take a lot of energy and a lot of
heat to warm it up and get it out of there. I was talking to a Canadian
company this morning, and in Canada they are now producing about 1.5
million barrels per day of tar sand oil. Their goal in a year or 2 is
to be at 3 or 4 million. They have been working on that for a long
time, because it was a process that they needed to develop and that
they needed to refine. They needed to figure out how to make it work.
Now, it seems that we down here in the States ought to be working
just as diligently on the shale oil reserves so that we would be energy
independent. The lady from Ohio was just talking about dependence. What
we are talking about is the issues I am talking about here. Taking the
9 trillion cubic feet away, taking the shale reserves out, will make
America not less dependent, but much more dependent on unstable foreign
countries.
I don't understand the lack of urgency in this body. We have not had
an urgency in this body since I have been here that I think is
adequate, because America does not realize that $82 oil might almost be
a plateau upon which we can have spikes. If we have a storm in the
gulf, it will spike. If we have a major sender of oil or a country we
are getting a lot of oil from has any trouble with their government or
any instability there or any kind of explosion in a pipeline or a
loading dock, we can have $100 oil. And we know then we would be
looking at maybe $3.75 to $4 gasoline. We currently don't have $3
gasoline in most of the country, some parts, but we soon will have,
because $82 oil will be more than $3 gasoline when it catches up in the
pipeline.
The legislation we have before us is making it very difficult to
produce in the Alaskan National Petroleum Reserve that was set aside a
long time ago. The rules are being changed. They are making it harder
to permit. They are making it harder to produce there. That is a $10
million oil reserve.
Then this one is the one that surprises me. I know a lot of Members
of Congress hate oil companies, hate big oil. But we passed legislation
here in the Senate, it is not law yet, thank God, that increases the
taxation on anybody who produces energy and processes energy by 5
percent. So any company that produces energy in America will pay a 5-
percent higher corporate income tax than anybody who manufacturers
anything else. Now I don't know why we would do that. I know they want
to get at the five big oil companies, but probably 75 to 80 percent of
the production is not by big oil. They are the processors. They are the
refiners. They are the marketers. But there is company after company
that are investing billions in America and billions around the world to
produce energy that are not big oil. They don't market oil. They drill
and produce and move and transport petroleum and other products to the
marketplace. Well, we are causing them to pay these taxes.
I have two refineries in my district still. One is a Penn grade crude
refinery, American Refiners in Bradford, about 10,000 barrels a day,
just a small refinery. They are going to pay 5 percent more corporate
taxes than any other business in Bradford, Pennsylvania. Is that fair?
No. That is not fair. What will that do? That will make energy more
expensive, not less expensive. It will not encourage people to produce
in this country. It will encourage them to produce in other countries
so they don't have to pay it.
United Refinery in Warren, Pennsylvania, that gets Canadian crude,
gets it under the lake; it comes under the lake in a pipeline. It is a
very good refinery. It has been growing about 70,000 barrels a day now.
It is a company that I am very proud of and have worked with for years.
They are going to pay 5 percent more corporate taxes now if this
becomes law. That will make it more expensive for them to produce the
gasoline and fuel oil for our people. Who will pay that? The consumers.
We will pay that.
Also, the language that we have been working on, I was fortunate in
the energy act in 2005 to put an amendment in that took away redundant
NEPAs. Now, NEPA is a study. It is an environmental assessment that is
very important that we do before we do anything on public land. Well,
those who oppose the production of energy, and that is a lot of people
in America, who don't want us to drill for oil, who don't want us to
drill for gas, who don't want us to dig for coal, don't want us to use
fossil fuels, and don't want nuclear, so they fight it. They fight it
in the courts.
{time} 1915
They use processes to make it difficult. I had people telling me in
the West they had leased 6, 7 years prior and were still unable to
drill a hole in the ground and bring any oil or gas up. It was because
they were being caused to do a NEPA study for every step in the
process.
Now, a NEPA study is a complete environmental assessment, and it's
appropriate. But should you do five or six NEPA studies before you can
drill for gas or oil? I don't think so. I don't think that is fair.
That is just about delay. That is not about environmental protection.
That is to prevent the production of energy.
I don't understand, because when you look at the chart, and let's
look at it, we are using 40 percent petroleum, and currently 66 percent
of that comes from, as the gentlewoman from Ohio said, foreign,
unstable non-democratic governments that you really can't depend on.
Natural gas is 23 percent of our energy. That is the one that has
been increasing. About 12 years ago we took away the moratorium on
using natural gas to make electricity, and now 21 percent of our
natural gas makes electricity. We now, for the sixth year in the row,
have had the highest natural gas prices in the world. That has been a
serious problem for business and industry, our job creators.
Dow Chemical, the largest chemical company in the world, in 2002 used
$9
[[Page H11016]]
billion worth of natural gas. That seems like an incredible figure.
Four years later, in 2006, they spent $22 billion. That's $9 billion in
2002, $22 billion in 2006. In four years, $22 billion, because the
price of natural gas had spiked in this country, higher than Europe,
higher than all our competitors, five to six times higher than South
America.
Natural gas prices have been one of the biggest drags on the American
economy, because we use it to melt steel, we use it to bend steel, we
use it to make aluminum, we use it to make ethanol, we use it to make
hydrogen, we use it to heat our homes. In the petrochemical business,
which Dow Chemical is in, they use it as an ingredient. Fertilizer,
it's an ingredient; plastic products, it's an ingredient; polymers,
it's an ingredient.
So natural gas is not only a fuel, but it's an ingredient. The face
creams that we all like, the skin softeners that keep our face and
hands soft, that is a direct product from natural gas. Natural gas is
the finest product known to man to make things with.
Then we have coal. The bulk of that is used to make electricity. I
had a gentleman ask me the other day, how are we coming on coal to
liquids, coal to gas?
Well, we are not. In World War II, Germany fought us with liquids
made from coal. It was called the Fischer-Tropes process. We have paid
many universities in this country and researchers to come up with other
ways. There are numerous ways now to make liquids. We could make jet
fuel, we could make gasoline, we could make diesel out of coal. We have
not refined it and we have not made it cost effective, but we know how
to do it. We can make natural gas out of coal. But there is such an
anti-coal sentiment in America, because it produces carbon in the air.
I said to the person, there have been groups in the Senate and there
have been groups in the House trying to put pilot projects or some way
of helping push the ball down the road for coal to liquid and coal to
gas so that we can be less dependent on foreign oil, but not one of
those has even come close to having a vote to get in any of the energy
packages that are moving.
We have clean coal technology to make electricity out of coal. It's
much cleaner than the old processes. But there are those who think
today they probably couldn't build one of those plants because there is
such opposition. Though we are the Saudi Arabia of coal, it's kind of
sitting on the sidelines.
Eight percent of our energy comes from nuclear. Since the Energy Act
of 2005, thirty-some companies have put in plans and requests for
permitting of new nuclear facilities, and I think all on existing
sites, expansion of current plants and new plants. In fact, I see the
other day that the first two permits to come in to build a completely
new reactor, not just additions, have come in.
But the 35 permits we have in process, I am told by the industry that
by 2020 we need them all to just keep nuclear at 8 percent of our
electric generation, because our electric use is rising so fast that we
need to grow nuclear or nuclear won't be 8 percent; it may be 7
percent, then 6\1/2\ percent.
Hydroelectricity is not growing. Clean energy, no pollution, but
there's great opposition. You couldn't build a dam in this country
today; that is not allowed. So hydroelectric is just where it's at, and
that percentage will continue to shrink. As the use of electric goes
up, this will go down to 2.5, 2.3, 2 percent. We have lots of dams in
this country that have not been harnessed, and there's been a real
resistance.
The only good news on the chart is biomass, which is wood waste and
things, pellet stoves, people heating their home from pellets. You have
factories heating in the woods where we have lots of forests and mills
where we process wood. They use it to heat the boilers to heat the
factory. They use it to top off some of the coal plants, which allows
them to meet air standards. It may be 80 percent coal and 20 percent
wood waste. Biomass has been growing. Of course, down the road we hope
to get into cellulosic ethanol. I will talk about that a little later.
Geothermal is a very good form of energy, but a very small
percentage. We use that by using the ground temperature, whether we
drill into wells and use the well water, or whether we put a loop
system in deep enough that you have the ground temperature and you take
heat out in the wintertime and take cold out in the summertime to cool
your home or heat your home. But that is a very expensive investment
and is usually done in new construction, and it is pretty disruptive to
do it in an existing neighborhood.
Wind and solar are the two sexy ones. They get a lot of talk, and
there are a lot of things going on there. But we see the percentage. If
we double these percentages, even if we triple these percentages, we
are not to 1 percent. These are very small numbers.
We all like them because they are clean. I shouldn't say ``we'' all
like them. We had a bill introduced this year that was introduced in
the Resources Committee that said if a bird was found at the foot of a
windmill, it was going to be a criminal offense. I think that language
was removed in the bill that moved. But that shows you that someone is
not very pro-wind, because birds and bats will occasionally get in that
path and hit those blades.
But these two, what the problem is, when the wind doesn't blow, we
have to have a natural gas generator to turn on. That is what we do.
Then solar, when the sun doesn't shine, we have to have a natural gas
generator to turn on. When you add these up, wind and solar and
geothermal, you are less than 1 percent of the overall energy mix. No
matter how much we increase them, they are a fraction. It will be a
long time before they are real numbers.
So what does that mean? That means whether we like fossil fuels or
not, we must have more petroleum, we must have more gas, we must have
more coal, we must grow nuclear, we should be growing hydroelectric.
Biomass is the only one that is really showing much growth.
But I want to tell you, the environmental groups in America that are
running energy policy, and certainly today in this House, are anti-
petroleum, because you drill a hole in the ground. They are anti-
natural gas. I don't understand that one, because natural gas is a
clean gas. There is no nitric oxide. There is no sulfuric acid. There
is one-third of the CO2, if you are concerned about
CO2. It is really the green field.
In my view, the only way we will survive or prevent a crisis in
America on energy is if we really pull the stops up and open up every
natural gas field we can until we can develop some of the renewables,
until we can find other sources of energy.
We have ethanol. Ethanol now, in 2006 we produced 5 billion gallons.
This year, we are at 6 billion gallons. So we are growing. Our ethanol
is made out of corn. Brazil's was made out of sugar cane. That was
cheaper to make.
To make ethanol out of corn, you have two processes. You have to take
the starch and turn it to sugar. Then you ferment the sugar and make
the ethanol that you use as a fuel. So it is a dual process. Ninety-
five percent of all these plants are fueled with natural gas. So we
need natural gas for that.
Natural gas, like I said, is the only fuel that can really prevent
this. We have a lot of petroleum being produced in this country, but we
can never be self-sufficient. People who think we are going to be
independent are just talking.
Natural gas, we can be self-sufficient, we can keep moderate prices.
We can expand natural gas use in our auto fleet and save a lot of oil
with natural gas, in my view. But natural gas is looked at just like
oil. You have got to drill a hole in the ground, and you must not do
that.
In my opinion, from the administration on down, there are really no
strong proponents of coal. There are Members of Congress that are
strong proponents, but certainly far from a majority. And I don't look
for any progress on coal. I don't look for any progress on petroleum. I
have not given up on natural gas, and I will talk about my bill in a
moment, because we believe that natural gas is our only hope of
diverting an energy crisis in America.
What do I mean by an energy crisis? I mean oil prices where we cannot
afford to compete. The problem we have today, Americans are struggling,
the poorer Americans are struggling, by the time they heat their homes
this winter, drive their cars, to have adequate funds left for health
care and
[[Page H11017]]
food and all the other substantives of life. Energy prices are going to
make it very difficult on the poor in this country as they continue to
rise. But even worse, and I know people don't care as much about
companies, but companies and businesses who are employing us, they make
up the payrolls. They give people a chance to make a living.
We have the highest natural gas prices in the world; and when our
companies are paying the highest prices for the fuel they use to make
products, then they are not competitive in the world marketplace.
We have lost more jobs in America than we can count. We blame it on
trade agreements; we blame it on lots of other things. But the last 6
to 7 years, natural gas prices were between $1.77 and $2 for years, we
had a couple of spikes in the seventies and eighties, and then the
climb started. Then came Katrina. Now we are up in the $7 and $8
figure. With a storm in the gulf, we could be back up to $14 or $15
again, because as we enter the heating season, we are at the low ebb of
the year, about $7 per thousand, but a lot the gas that is in the
ground for this year's use, we paid $8, $9 and $10, because we put gas
in storage all for the winter usage. I don't know what the average
price is coming out, but most of the utilities have told us 9 to 20
percent more for heating a home with natural gas this year, depending
on which utility you are on, when they bought their gas or how they
bought their gas.
So we are looking at a measurable increase. We are looking at a real
spike in fuel home heating prices, because $82 oil will be the most
expensive home heating prices we have ever had. Propane comes from
both, so propane will be somewhere in the mix. It is always more than
natural gas. So the cost of heating our homes this year will be very
important.
Now, let's bring up the chart on what we think is the solution, the
best thing we can do.
Here is a picture of this country. You could also have some great big
blobs in here where we have locked up huge resources of natural gas and
coal and oil that are on public land, because in the West, the vast
majority of the land is owned by the Federal Government.
But where we are different than any other country in the world is we
have chosen to lock up our Outer Continental Shelf. What is the Outer
Continental Shelf? Well, Mr. Speaker, that is from 3 miles offshore to
200 miles offshore. Every country in the world produces a lot of their
oil and gas out there, because it is very prevalent.
Now, we produce in just a small piece in the gulf, and we get 40
percent of our energy from there. This small area down here is what
keeps America alive. Otherwise, we would be importing 80 to 90 percent
of our oil from foreign countries.
I just find it amazing that we have chosen as a country that we are
just not going to produce more. Maybe 10 years ago when gas was $2 a
thousand and oil was $10 a barrel, it may have been a smart argument,
let's buy theirs while it is cheap and save ours for when it is
expensive.
Well, we are still saving ours. We have $82 oil. We are still saving
ours. I think if we had $90 oil next month, we would still be saving
ours. I have been here awhile. We have been trying to open up this for
a number of years. We had a successful bill last year, but we didn't
have success in the Senate. But it makes no public policy sense to not
be producing oil and gas off our Outer Continental Shelf.
{time} 1930
It is the safest with the least environmental impact. The sight line
from shore is about 11 miles, so when you are past that, you can't see
it. The commotion caused from a drilling rig, a thousand drilling rigs,
is less than one storm as far as turmoil on the ocean floor. And there
hasn't been a major spill of oil except for the one in Santa Barbara in
1969.
The technology of today is when a storm comes or there is a problem,
the valve of the rig on the ocean floor is electronically turned off.
When we had the tremendous storms in the gulf several years ago, we had
very little spillage because when the storm was coming, they turned off
the valves. If the platforms move, the rig is ruined, nothing happens.
We have always had more spillage in the ocean from hauling oil in
tankers than from wells. But we don't prohibit tankers because then we
wouldn't have any oil.
I don't understand why we are financing all of these countries in the
world by being dependent on them. They are not our friends. They were
the ones that sent those here on 9/11, but we are funding them with
these huge oil costs and we just plain will not use our own. There is
no good reason why we couldn't be producing a lot more of our own
energy, totally self-sufficient in gas, stable prices and competing
with the world with all our manufacturing. We can help oil prices in
the world by supply, but we cannot dictate them because we are not that
big a player unless we learn how to use our shale oil down the road,
and then we could say good-bye to the foreign imports.
But it seems to me that we ought to be opening up the OCS. That is
the simplest. And my proposal is pretty simple. We are just going to
open it up for natural gas. We are going to say the first 50 miles,
that is up to the States. Only if the State wants to open it, can they.
We are not opening it.
The second 50 miles would be open for natural gas only, but a State
would still have the ability to say no. They could pass a law in their
State and say Congress, we don't want this open. Then it would be
protected for 100 miles.
For the second 100 miles, our bill would open gas. I would like to be
opening oil out there, too, because that is so far out, there is just
not an environmental problem. But we are just asking for gas because we
think gas is more of a crisis than oil because we are going to lose
more jobs in this country because of the highest natural gas prices in
the world.
Mr. Speaker, $80 oil is pretty painful, but it is painful to the
whole world. That is the world price. When we have gas that is twice
and three times and four times what competing countries are at, we are
at a disadvantage.
We have lost half of our fertilizer industry in the last 2 years
because of natural gas prices. We are losing our petrochemical
industry. Those are some of the best jobs left in America. We are going
to be losing our polymer and plastic jobs because of natural gas
prices. It just seems to me that we really, really need to change our
attitude in this country and say let's be more independent.
Those who tell you we can be independent are not being honest with
you. I don't know of any way we can be independent. We will also always
be dependent on foreign energy in our lifetime. Maybe some day with new
forms of energy or new ways of powering vehicles and new ways of
lighting and heating our homes, if we can do that, some day we might
be. But all of the things that we are working on are still on the
margins. We want to grow them all. We want to move them as fast as we
can. We want all of the renewables that we can get. But those who tell
you that renewables will take care of even the growth in energy needs
are not being honest with you. And those who say that renewables
displace oil and gas and coal needs in this country are not being
honest with you because they just can't.
We need to have the OCS opened up. We need to promote all of the
renewables we can. The President is promoting cellulosic ethanol. We
are at 6 billion gallons of ethanol, and they want to get to 35. That
is a big jump. I don't know whether we can get there. They want not to
just be corn. And I noticed today corn prices are approaching $4 a
bushel again. When we started making ethanol, corn was less than $2.
Nobody knows where it is going to be when we go through another season
because there are a lot of ethanol plants being built. We will have a
lot more capacity a year from now to make ethanol.
There are problems with ethanol. It takes a lot of energy to make it.
I am not opposed, but it costs a lot to make it. And one of the
problems is that ethanol cannot be put in a pipeline system where the
vast majority of our energy is put out to the stations. We have to
blend it at the station or blend it at the distributorship and haul it
in tankers because it has a corrosiveness to it. So unless we change
all of the pipelines in the country, ethanol has a serious problem that
we have not been able to overcome yet. We have to haul it separately
and then blend it at the station
[[Page H11018]]
in a tank. So it has a distribution problem.
The President wants to do cellulosic ethanol which will be from any
kind of waste material. It could be from wood waste when you ferment it
to make it. Or it could be from garbage, which seems to make some
sense. It could be from things like switchgrass and cornstalks and any
kind of cellulose, cellulosic ethanol.
The problem is that it is still in the laboratory. We think we have
about got it to where we can make it. They are funding six plants which
are going to be experimental. I am for that, but I think we should be
doing the same thing simultaneously with coal. Taking every process we
have to make liquids from coal and refining it, improving it so we can
do it in volume down the road. Coal to gas and coal to liquid, every
measure we know, we ought to be refining those and getting those to
where they will help us to be independent.
And we should be continuing to promote nuclear. The nuclear we have
on the drawing boards will keep us from losing percentage. It will not
help us grow, but we need to figure out, and that may be one of the
biggest mistakes we made, if we are really concerned about
CO2, we certainly should be for nuclear power plants.
But we need to be doing all of these, Mr. Speaker. We need the OCS
open. We need that clean, green natural gas, affordable and available
to heat our homes, run our businesses, and manufacture products so we
can compete in the world marketplace. We need clean, green natural gas
as well as cellulosic ethanol, as well as all of the renewables, as
well as coal to liquids, as well as coal to gas, and as well as clean
coal technology and more nuclear plants.
A lot of our competitors, like China and India, they are buying up
reserves of oil and gas all over the world. They are building coal
plants, coal-to-liquid plants. They are building hydrodams. They are
building every form of energy there is at breakneck speed. We as a
country are sitting here on our hands twiddling our thumbs, actually
today moving in the direction of less available energy, which will make
us more costly and more foreign dependent.
The legislation that we have before us, if it becomes law, I think
will speed up, and we have been gaining in dependence on foreign oil
about 2 percent a year for the last 10 years. I think we will speed it
up to 3 to 4 percent a year if we go down to the road of taxing oil
more, of taking major plateaus and major reserves off the table,
refusing to open up the OCS, our dependence will grow. When you are at
66, you don't have to go very far to where you're three-fourths, and
then you are 80 percent and the rest of the world will just plain own
us because they today, OPEC today sets the price of oil. Five years ago
they didn't. They had lost their grip. But today, they set the price of
oil.
Imports. This is not quite up to date. I am going to have to get a
new chart with 2 more years on it. But we are back on a steady climb. I
predict it won't be very long until we will be at 70. And if we pass
the legislation that is before the House and do nothing else, do
nothing to open up, do no OCS, do no Alaskan, and continue to take much
of the Midwest out of the picture, continue to lock up more reserves,
we will be 70 and climbing towards 75 at breakneck speed and America
will be dependent for their total economy, for the ability to heat
their homes and manufacture, on foreign, unstable nondemocratic
countries who will actually and literally own us. That's not the
America I want for my grandchildren and for your grandchildren. I want
an America that has a sound energy policy that produces oil, produces
gas, produces coal, moves into all of the renewables and does more on
conservation.
I haven't talked about conservation, but prices are going to force us
to conserve. There are many who want prices as high as we can get them
so we will use less energy. Well, they are winning. And I am going to
tell you, energy prices this winter will be the highest they have ever
been, and we will be dependent on weather as to how high they go.
Major storms in the gulf, major cold weather where we consume a lot
of heat, will set prices far higher than they are today. We are not in
control. The weather and unstable parts of the world will dictate what
America does for energy.
____________________